Gold fell 1% on Friday as investors locked in profits after a strong run and equities recovered slightly, but worries about a global recession and lack of clarity on the U.S.-China trade war kept bullion on track for a third straight weekly gain.
Spot gold was down 0.9% at $1,509.43 per ounce as of 0938 GMT, but is up 0.8% so far this week.
U.S. gold futures fell 0.8% to $1,519.40.
"It looks like a temporary retracement," said SP Angel analyst John Meyer.
"There are many investors who fear the next global crisis so there is this a sense of ongoing investment into gold, particularly by central banks."
World stocks rose as China hinted at more support for its economy, amid growing expectations of aggressive stimulus from all the major central banks.
Also weighing on gold was gains in the dollar after data showing U.S. retail sales surged in July helped assuage some fears of a recession. .
The metal is consolidating above $1,500, Capital Economics analyst Ross Strachan said, adding traders could be taking profits after the recent sharp moves upward.
"Gold is getting a lot more investor interest so it's getting significant volatility," Strachan added.
Bullion has risen more than $100 since the beginning of the month amid the heightened trade tensions and a slew of disappointing economic data globally.
Earlier this week, 10-year Treasury yields dropped below the 2-year yield for the first time in 12 years. Curve inversion is widely considered a warning that the economy is headed for recession.
On the trade front, U.S. President Donald Trump said on Thursday he believed China wanted to make a trade deal and that the dispute would be fairly short.
This comes after Beijing vowed to counter the latest tariffs on Chinese goods but called on Washington to meet it halfway on a potential deal.
"There are major fundamental questions to be resolved between the two sides and that is making people hesitant of reaching a conclusion (on the talks)," Strachan said.
Investors will now focus on the Federal Reserve's annual symposium next week for further hints on monetary easing. Traders see about a one-in-three chance of a 50 basis-point rate cut by the Fed this September.
On the technical side, spot gold may fall into a range of $1,483-$1,503 per ounce, according to Reuters technical analyst Wang Tao.
Elsewhere, silver fell 0.9% to $17.11 per ounce, but was on track for a second consecutive weekly gain.
Platinum fell 0.5% to $834.58 an ounce, while palladium edged 0.2% higher to $1,447.42 an ounce.
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